BILL NUMBER: AB 429	CHAPTERED  09/30/00

	CHAPTER   1027
	FILED WITH SECRETARY OF STATE   SEPTEMBER 30, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 30, 2000
	PASSED THE SENATE   AUGUST 31, 2000
	PASSED THE ASSEMBLY   AUGUST 31, 2000
	AMENDED IN SENATE   AUGUST 25, 2000
	AMENDED IN SENATE   AUGUST 14, 2000
	AMENDED IN ASSEMBLY   MAY 20, 1999
	AMENDED IN ASSEMBLY   APRIL 29, 1999

INTRODUCED BY   Assembly Member Correa

                        FEBRUARY 12, 1999

   An act to amend Sections 22141, 24415, and 24417 of, and to add
Section 24410.7 to, the Education Code, relating to the State
Teachers' Retirement System.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 429, Correa.  State Teachers' Retirement System:  supplemental
benefits.
   Under the State Teachers' Retirement Law, retired members and
nonmember spouses, disabled members, and beneficiaries of the Defined
Benefit Program, as defined, receive monthly allowances that are
subject to supplementary increases to preserve their purchasing
power.
   This bill would increase the monthly allowance amounts payable to
retired members and nonmember spouses, disabled members, and
beneficiaries according to a specified schedule, payable commencing
on or before July 1, 2001, and provide for additional supplemental
increases to those benefits to preserve their purchasing power, as
specified.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 22141 of the Education Code is amended to read:

   22141.  Notwithstanding Section 22140, "improvement factor" means
an increase of 2 percent in benefits provided under Sections 24408
and 24409 for each year commencing on September 1, 1981, and under
Section 24410.5 for each year commencing September 1, 2001, and under
Sections 24410.6 and 24110.7 for each year commencing September 1,
2002.  The factor shall not be compounded nor shall it be applicable
to annuities payable from the accumulated annuity deposit
contributions or the accumulated tax-sheltered annuity contributions.
  The Legislature reserves the right to adjust the amount of the
improvement factor up or down as the economic conditions dictate.  No
adjustments of the improvement factor shall reduce the monthly
retirement allowance or benefit below that which would be payable to
the recipient under this part had this section not been enacted.
  SEC. 2.  Section 24410.7 is added to the Education Code, to read:
   24410.7.  (a) The monthly allowance payable on the effective date
of this section, excluding annuities payable from accumulated annuity
deposit contributions and tax-sheltered annuity contributions and
benefits payable pursuant to Sections 24410.5 and 24410.6, to retired
members and nonmember spouses, disabled members, and beneficiaries,
including option beneficiaries, shall be increased by the percentage
set forth opposite the applicable period during which retirement,
disability, or death occurred set forth in the following schedule:


    Period during which retirement,
    disability, or death occurred:               Percentage:
    36 months ending Dec. 31, 2000               0.0%
    12 months ending Dec. 31, 1997               1.0%
    24 months ending Dec. 31, 1996               2.0%
    60 months ending Dec. 31, 1994               3.0%
    60 months ending Dec. 31, 1989               4.0%
    120 months ending Dec. 31, 1984              5.0%
    Dec. 31, 1974 or earlier                     6.0%


   (b) The increase provided pursuant to this section is in addition
to any payments received by a retired member or nonmember spouse,
disabled member, or beneficiary, including an option beneficiary,
under Section 24415.
   (c) Benefits payable under this section shall be initially payable
by the system on or before July 1, 2001.
  SEC. 3.  Section 24415 of the Education Code is amended to read:
   24415.  (a) The proceeds of the Supplemental Benefit Maintenance
Account shall be distributed annually in quarterly supplemental
payments commencing on September 1, 1990, to retired members,
disabled members, and beneficiaries, as defined in subdivision (a) of
Section 22107.  The amount available for distribution in any fiscal
year shall not exceed the amount necessary to restore purchasing
power up to 75 percent of the purchasing power of the initial monthly
allowance after the application of all allowance increases
authorized by this part, including those specified in Section 24412,
and excluding those provided pursuant to Sections 24410.5, 24410.6,
and 24410.7.
   (b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries, as
defined in subdivision (a) of Section 22107, whose allowances, after
sequentially applying the annual improvement factor as defined in
Sections 22140 and 22141, and the annual supplemental payment as
specified in Section 24412, have the lowest purchasing power
percentage.  The purchasing power calculation for each individual
shall be based on the change in the All Urban California Consumer
Price Index between June of the calendar year of retirement and June
of the fiscal year preceding the fiscal year of distribution.  In any
year in which the purchasing power of the allowances of all retired
members, disabled members, and beneficiaries, as defined in
subdivision (a) of Section 22107, equals not less than 75 percent and
additional funds remain from the allocation authorized by this
section, those funds shall remain in the Supplemental Benefit
Maintenance Account for allocation in future years.
   (c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.
   (d) The increases provided by subdivision (b) are not cumulative,
not part of the base allowance, and will be payable only to the
extent that funds are available from the Supplemental Benefit
Maintenance Account.  The board shall inform each recipient of the
contents of this subdivision.
   (e) The adjustments authorized by this section are vested only up
to the amount payable as a result of the annual appropriation made
pursuant to Section 22954 and shall not be included in the base
allowance for purposes of calculating the annual improvement defined
by Sections 22140 and 22141.
   (f) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Section 24410.5
for members and beneficiaries receiving benefits pursuant to
subdivision (b), the purchasing power calculation shall be based on
75 percent of the change in the All Urban California Consumer Price
Index between January 2000 and June of the fiscal year preceding the
fiscal year of distribution, after the application of increases
authorized by Section 24412 that are made to the allowances provided
pursuant to Section 24410.5.
   (g) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Sections 24410.6
and 24410.7 for members and beneficiaries receiving benefits pursuant
to subdivision (b), the purchasing power calculation shall be based
on 75 percent of the change in the All Urban California Consumer
Price Index between January 2001 and June of the fiscal year
preceding the fiscal year of distribution, after the application of
increases authorized by Section 24412 that are made to the allowances
provided pursuant to Sections 24410.6 and 24410.7.
  SEC. 4.  Section 24417 of the Education Code is amended to read:
   24417.  (a) The proceeds of an auxiliary Supplemental Benefit
Maintenance Account shall be distributed annually in quarterly
supplemental payments, commencing when funds in the Supplemental
Benefit Maintenance Account are insufficient to support 75 percent,
to retired members, disabled members, and beneficiaries, as defined
in subdivision (a) of Section 22107.  The amount available for
distribution in any fiscal year shall not exceed the amount necessary
to restore purchasing power up to 75 percent of the purchasing power
of the initial monthly allowance after the application of all
allowance increases authorized by this part, including those
specified in Sections 24412 and 24415, and excluding those provided
pursuant to Sections 24410.5, 24410.6, and 24410.7.
   (b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries, as
defined in subdivision (a) of Section 22107, whose allowances, after
sequentially applying the annual improvement factor as defined in
Sections 22140 and 22141, and the annual supplemental payment as
specified in Sections 24412 and 24415, have the lowest purchasing
power percentage.  The purchasing power calculation for each
individual shall be based on the change in the All Urban California
Consumer Price Index between June of the calendar year of the benefit
effective date and June of the fiscal year preceding the fiscal year
of distribution.
   (c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.
   (d) The increases provided by subdivision (b) are not cumulative,
nor part of the base allowance, and will be payable only to the
extent that funds are available from the Supplemental Benefit
Maintenance Account and the auxiliary Supplemental Benefit
Maintenance Account.  The board shall inform each recipient of the
contents of this subdivision.
   (e) The distributions authorized by this section are vested only
up to the amount payable as a result of the annual appropriation made
pursuant to Section 22954 and shall not be included in the base
allowance for purposes of calculating the annual improvement defined
by Sections 22140 and 22141.
   (f) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Section 24410.5
for members and beneficiaries receiving benefits pursuant to
subdivision (b), the purchasing power calculation shall be based on
75 percent of the change in the All Urban California Consumer Price
Index between January 2000 and June of the fiscal year preceding the
fiscal year of distribution, after the application of increases
authorized by Section 24412 that are made to the allowances provided
pursuant to Section 24410.5.
   (g) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Sections 24410.6
and 24410.7 for members and beneficiaries receiving benefits pursuant
to subdivision (b), the purchasing power calculation shall be based
on 75 percent of the change in the All Urban California Consumer
Price Index between January 2001 and June of the fiscal year
preceding the fiscal year of distribution, after the application of
increases authorized by Section 24412 that are made to the allowances
provided pursuant to Sections 24410.6 and 24410.7.
